because when you start adding the incremental cost and this and that and the other thing. but, look, right now i believe that kids coming out of college today, i said this last week to a group db. >> ten seconds. >> kids coming out of college right now. >> i'm glad you're saying that. >> ken langone, one of the greats. join us tomorrow. street -- "squawk on the street" begins right now. health and human secretary kathleen sebelius about to take the mic. in her prepared remarks she's says "the initial consumer experience of healthcare.gov have not lived up to the expectations. american people and are not acceptable. we are committed to fixing these problems as soon as possible.

s&p up 13 of the past 15 sessions. we do have a fed decision this afternoon. even initial reviews of the apple ipad air. as we monitor the hearing this morning in washington, let's get to jim. first, broad markets, we've not had a run look we've had this month in a long time. whether you're larry fink or others, people asking serious questions about when in ends and how it ends. >> you keep thinking it should end and then general motors comes out with a quarter that says, hey, listen, we're back, too. you keep thinking it will end and then i sit back and listen to some of these conference calls and various industries. buffalo wild wings. you can say they're small potatoes but they're blowing the number away. gilead last night, a remarkable

quarter. i keep getting stunned by the facts, even though the thesis should be we're too far too fast, the facts keep baring out the rally. >> not to mention the fed is not likely to taper any time soon, let's say. there are those like fink who are saying maybe we're getting a little far long here and then there's the david tepper argument, which is, hey, multiples are not that high, i can see multiples expanding and i'm going to be fine and earnings to your point is been -- >> okay. >> look at kimberly clark. a little organic growth. everyone knows kleenex, okay? goes from 93 to 108. both number got better but the 10-year went to 2.4. the 10-year is not competitive to the bond market equivalent stocks. this is the percolation of the fed and it makes you think, wait a second, why shouldn't i go

back to general mills? especially with corning down 40% year over year. >> do you think an outlier surprise in this decision this afternoon is going to be a comment about asset markets? do they need to calm us all down? >> then again, the employment numbers are still terrible. >> adp, 130 is a miss, granted with the shutdown effect. >> we're seeing deflation across the board, whether it be in u.s. m minerals, grain complex, and i keep coming back to low inflation, no jobs, don't fight the fed, don't fight the tape. >> you can see the secretary taking her mic. i assume we'll get sworn in, some opening statements here in the next couple of minutes. quickly zero in on gm.

96 cents does beat 94 cents, revenue a little shy, narrower loss in europe and the battle between them and ford in the states is tough and -- >> in the 1980s we used to look at the -- geez, i'm old. in the 1980s we used to look at the share, oh, wow, ford picked up a point. gm just picked up a half point, sell ford. then you didn't care anymore because they lost money on every car. remember they were the largest buyer of viagra. remember the jokes when viagra was the key to the market? now we're back to thinking when europe switches these companies are going to make a lot of money. talk about the tepper argument, these are companies that could be selling at six times next year's earning. we're supposed to sell them and buy what? what are we supposed to buy? cds?

up .6? what do we do with our money? the answer is stay pat. just stay in. because everything sells awful. >> have you roof responded to what fink said yesterday at this conference in chicago, that there are bubble-like markets, that it's imperative the fed begin to taper? >> my response is buy blackhawk at 303, nice job. i remember when goldman was at 160 and blackrock at 270. i'm sorry to be so granular to larry fink and say great job, but is it stock supposed to be 270? i don't know. should the fed be tapering? if you care about employment, no. if you care about inflation, no. if you think that stocks are too high, sell 'em. >> well, there is an argument to be said. >> comcast -- i'm a little concerned about our parent company, 129,000 lost video subs. >> as will of 117 last year.

>> and there had been a hope it would go the other way. >> 65 cents, did beat 61. high-speed customers plus 297. >> you mention it's our company but the cash flow up 30%, profitable growth for everybody there. >> yeah. there's some competition on the video side with uverse, which section panding very aggressively but a very strong quarter. we'll see if people focus on the loss of subs. >> what's being sold because it's too expensive? yesterday apple went down $13. sells at eight times earnings. i'm always caught by this notion that we are all u.s.-centric. ken langone had comments about great american companies selling cheap hi. 20% of the average industrial i follow is europe. 23%. i did the calculations of the companies that have come on "mad

money," all these big industrial companies. what happens if they get 2% growth in europe and they fired so many people over there. if you just look at the united states, yes, maybe the fed -- i don't know, the fed should taper, the economy is getting stronger. but then again, the health care is going to be a very big headwind, what we're about to listen to. did the republicans come together with the democrats while we were -- while they've been away? what were they doing? they playing golf together? no. are they having a brewski together or soda stream? no. they're not doing anything. i say bring on the fight, here we are as a network trying to say rise up. they're thinking sink down. ken langone said i'm a republican. what are you republicans doing? and the guy was like you tell me. i mean -- >> they hate each other. >> nothing's changed. >> what do you make of critics of the private sector who say this market is all about ibm adding 15d billion to their buyback, not investing in capex,

not investing in human capital. >> i think they've lost their way. warren buffett, he always said don't buy tech. ibm, i don't want buyback. same with carl icahn and apple. i want growth. i want the growth that the industrials give us zuch want proper capital allocation. >> right. international paper comes on. >> if you have $150 billion in cash, maybe you return some to the shareholders. >> when i look at ibm, it seems dead in the water. but they don't have the revenue growth. i mean, you can buy back stock and that's great, that's terrific. i can own a bond, too. but i don't -- it's not what i want from a company. i want 30% cash flow growth, i want a turn in europe, i want some -- it's arguably a reason to buy it besides, just, oh, good, they're buying back. if i want that, i'll buy altria.

i'll take that ibm, even though i feel like i need to take a shower when you walk down the street in new york because of all those people smoking. they're still smoking people. >> outside. >> increasingly videotaaipingin. >> and our great mayor -- >> he's turned on sodas, too. >> we're going to have an ipo today for crto, quite sharply, 3d $31. it's in that ad tech area. some people tell me they like their model more at crto with the proprietary ceo. they get unfettered access to a

web site, they remarket and retarget people coming there and getting them to a very profitable outcome. dhar a customer of google but also compete with google. >> good luck. >> i hear they're doing a halfway decent margin. they're margins are not what google's are but 100% revenue growth. >> it could be opening in the 50s or perhaps even higher. >> there we go again. another company that has the growth that managers want. and they don't really want the big buybacks. look at apple. apple had decent growth. some guys are focused on how much they're going to buy back? no. i want apple to have a division of a company up just mentioned. >> speaking of product, the ipad air gets reviews today. and pretty much the dean of all tech columnists says it's the best tablet he's ever reviewed. blown away i think were his worlds by the battery life and

the speed of the process oorks which allows you to run basically apps that are more than glorified iphone apps. >> i immediately went to my close friends and relatives and said you want to know what to buy me, i want this. it's terrific. i also like the kindle. but that device, it's a must own. i watch sports on the ipad. i want a more portable, lighter ipad. i watch it in bed and i watch it when other people watch other things who don't know as much as i do about what to watch, i watch sports. >> linkedin, q4 revenue up 37 to 38, current quarter up 56, a bit of a slowdown. i think the stock is going to open lower this morning. >> you always want to see accelerated revenue growth forecast. lincoln has a history of being

very conservative, which is why you got three different price target increases today. >> be careful on that. >> here is the secretary of state of health and human services, kathleen sebelius. >> i will now swear you in. if you would rise. as ranking waxman answered just discusseds committee is hold ag investigative hearing and when doing so have had the practice of taking testimony under oath. do you have any objection to testifying under oath? and the chair now advises you that you are -- i will now read you the oath. do you swear that the testimony you are about to give is the truth, the whole truth and nothing but the truth? you are now under oath. and subject to the penalties set for the in title 18 section 1001

of the u.s. code. you may now give a summary of your five-minute statement. welcome again and thank you for being here. >> you got to use that mic. you don't know how many people want to hear you this morning. >> thank you chairman upton, ranking member waxman, members of the committee. i love my position as governor of kansas four and a half years ago for the opportunity to continue work i've been doing for most of my over 35 years of public service, to expand the opportunities for all americans, regardless of geography or gender or income to have affordable health coverage. during my years as a state legislator, as an elected insurance commissioner, as head of the national association of insurance commissioners and as a two-term governor and now as hhs secretary, have i worked on that effort that i care deeply about. there are still millions of americans who are uninsured, as

well as underinsured, people who have some coverage at some price from some illness but who have no protection from financial ruin and no confidence they'll able to take care of themselves or their family if they have an accident or illness. in the past few weeks, access to healthcare.gov has been a frustrating experience for americans. i am as frustrated and angry as anyone with the flawed launch of healthcare.gov. so let me say directly to these americans, you deserve better. i apologize. i am accountable to you for fixing these problems and i'm committed to earning your confidence back by fixing the site. we're working day and night and we'll continue until it's fixed. we've recently added new manage

mental e mentour extensive assessment ha determined that healthcare.gov is fixable. i want to outline a couple of improvements we've made to date. we now have more users successfully creating accounts. we can process up to 17,000 account registrations per hour or nearly five per second. instead of some of the users seeing a blank screen at the end of the application process, they can now see whether they're eligible for financial assistance and make more informed decision. because we've improved performance, customers can now shop for plans quickly. filtering plans takes seconds, not minutes. users are getting fewer errors and time-out messages as they

move through the process. and the system has been strengthened, doubled the size of servers and a physical database, which replaces the previous system. if you read the statement of verizon, who hosts the cloud service, it is the verizon server that failed, not healthcare.gov and it affected not only hhs but other customers. we still have a lot of work to do beep have a plan in place to address key outstanding issues. it includes fixing bugs in software that prevented it from working the way it's supposed to and refreshing the user experience so folks can navigate the site without encountering error messages, time-out and slow response times and by the end of november, we are committed that the vast majority of users will be able to review their options, shop for plans and enroll in coverage without the problems that way too many

are experiencing. but consumers are using the site every day and will continue to do so and problems are being solved, but we know we don't have a fully functioning system that consumers need and deserve. we are still at the beginning of a six-month open enrollment, which extends through the end of march and there's plenty of time to sign up. the average open enrollment for an insurance plan is two to four weeks. the new marketplace has a 26-week open enrollment. those who enroll by december 15th will be able to access their benefits on day one. even with the unacceptable problems with health care.gcare many are benefiting, young adults, americans will preexisting health conditions, seniors on medicare. the 15% of our neighbors and

friends who are uninsured have have affordable, new options in a competitive market. and cost growth for health care is lower than it's been in years. millions of americans are clearly eager to learn about their options and to finally achieve health security made possible by the affordable care act. my commitment is to deliver on that promise. thank you, mr. chairman. >> well, thank you very much. the mic got pulled a little bit from you. >> i appreciate your leadership this morning. we've worked with the house floor to make sure we won't be interrupted. we're going to be reducing the

time for questions to be just four minutes so hopefully we can get through all the members that are here. and i'm going to be pretty fast with the gavel, let me just say. so we've got plenty of questions so let's try and get through them. you know, i think everyone in america remembers the president's words, "if you like your health care plan, can you keep it." period. under the affordable care act, insurance policies that were in effect on march 23rd, 2010, when the law was enacted would be grandfathered. then a few months later despite the president's word, you all at hhs helped promulgate a new reg that in your own review showed it effectively could deny perhaps as many as more than 50%, maybe even higher of those holding individual policies the right to renew their own insurance plan. and i would guess that there are a lot of us on this panel today that are hearing from angry and

confuse confused constituents, who are now being forced to go on to a an inept web site, whether they like it or not, to shop for a new roo plaeplacement policy, f premiums as high as 100% before and some up to 400% higher that i've heard from as well rising deductibl deductibles. when was the president informed of the regulation change? if so, was he informed this totally undermines his biggest selling point. in a statement each made more than three years after the regulation change was promulgated, the president said again, "the first thing u need to know is this -- if you have already have health care, you don't need to do anything." he's been on the same page from the very start, yet the

regulations changed months after the bill was enacted that are now causing perhaps millions of americans to be denied the ability to renew their individual coverage. why was that change made? and did the president know it? >> well, mr. chairman, there was no change. the regulation involving grandfathered plans, which applied to both the employer market and the individual market indicated that if a plan was in effect in march of 2010, stayed in effect without unduly burdening the consumer with reducing benefits and adding on huge cost, that plan would stay in effect and never have to comply with any of the regulations of the affordable care act. that's what the grandfather clause said. the individual market, which affects about 12 million americans, about 5% of the market, people move in and out, they often have coverage for less than a year, a third of them have coverage for about six months, and if a plan was in

place of march of 2010 and, again, did not impose additional burlds on the consumer, they still have it. it's grandfathered in. >> but why not let the consume ever decide whether-the-want to renew it or not? why were regulations promulgated in the summer of 2010, which undermined the -- >> there were no regulations changed. we outlined a grandfather policy so people could keep their own plan. we then began to implement the other features of the the affordable care act. if someone is brieing a brand new policy in the individual market today, they'll have consumer protections for the first time. many people in the individual market are medically underwritten. that will be illegal. many women are charged 50% more than men. that will be illegal. you cannot, again, eliminate someone because of a preexisting health condition. you can't dump someone out or lock someone out. so those provisions -- but if again, a plan was in place and

was in place at the time that the president signed the bill and the consumer wants to keep the plan, those individuals are grandfathered in and that's happening across the country in the individual market. >> we're learning that folks who did have a plan who liked it are being told in fact it's cancelled. my time has expired. let me yield to the ranking member, mr. waxman, for four minutes. >> thank you, mr. chairman. i had to smile at your line of questioning. everybody expected this hearing was about the web site. that's all we've been hearing about is the web site. but that's not the only complaint we've been hearing about since the affordable care act was adopted. we were told by our republican friends that millions of jobs would be lost. and, in fact, there have been gain of 7 million jobs. they said that the cost for health care would skyrocket and in fact, the opposite is true. they said there would be a massive shift to part-time jobs and the evidence doesn't support that. they said tens of millions will

lose their insurance. but, in fact, everybody in this country is going to have access to health insurance because they won't be discriminated against. they said that it would explode the deficit. and yet all the reputable organizations like the congressional budget office, have told us that it's going to save us $100 billion over ten years. so we've had a litany of objections from the republicans about the affordable care act, which has driven them to such a frenzy they even closed the government. so now we have you before the committee. and you're being asked, i suppose later you'll be asked about the web site. but let me pursue this question about individuals who have gotten notices that they're going to have their individual insurance policies cancelled. they'll be able to get another plan, won't they? >> actually, it's the law that they must get another plan. continuous coverage is part of

the law. and that wasn't the case in the past. >> affordable care act said we're going to end the worst abuses of insurance companies, create consumer protection that they'll be able to buy a policy, even if that's been sick in the past that, women won't be charged more than men that, we're not going to let insurance companies deny coverage because of preexisting conditions and we're we're not going to let them put these lifetime caps and there will be an essential benefit package. so you're not just buying some things and having other things coveraged, you're dwog have the minimum that everybody sudden have, prescription drugs, mental health hospitals. are they important coverages? >> i would say they're very important. as a former insurance commissioner, i can tell up the individual market in kansas and anywhere in the country has never had consumer protections. people are on their own. they can be locked out, priced

out, dumped out. that happened each and every day. this will finally provide the kind of protections that we all enjoy in our health care plans, as part of a group, as part of a plan that has renegotiated benefits. we enjoy that kind of health security. and individuals in the buying the farm on their own, entrepreneurs, young adults have never had that kind of health security. >> now they're going to have this health security and most of the plan, as i understand, it that they're not longer going to be able to keep don't meet all the standards of the law. >> again, i think you may have heard pat garrity from florida blues who was on some of the summer shows who talks about the fact that the florida plans want to keep their customers, they have new plans to offer. they feel a lot of people and these are mr. garrity's words will have a much better plan at

a similar or lower cost. 50% of these 11 million to 12 million people qualify for a subsidy, for financial help purchasing insurance for the first time ever. >> the bottom line is that people with good coverage like medicare, medicaid, employer coverage can teep that. people will grandfathered mans had be able too keep it. but if an insurance company sold you a new modified health insurance policy after the date of the factment that does not meet the law's standards, those people will be able to go into the exchange and buy a real, solid health insurance plan that won't discriminate against them or anybody else. i think that's a good result and i think most people will be as well. >> the chairman recognizes, vice chairman of the committee, ms. blackburn. >> thank you, madam secretary. >> that was henry waxman, along

with fred up to and, the chair. just giving you a flavor of the kinds of questions the secretary is going to get over the next hour or so. we'll take as much of this as we can live but of course we are about two minutes away from the opening bell. jim? i mean, there's something to watch, right? we'll try to keep our eye on the fed today but this is going too drive a lot of the conversation. >> obviously she's on the hot seat. congressman waxman saying the real issue isn't the web site. no, the real issue is the web site because that's how people interface with it. people i know trying to get health care going on to it, didn't work. part of life is the procedure, showing up. people are showing up and it's not working. people call for her head, want to see accountable because they know they would have lost their jobs themselves. did you this at work.

thought it was interesting. who's to blame, david? did you have know it was verizon? i didn't know it was verizon. it was verizon's fault. did you see it was -- >> did you see at the open here? >> i didn't know it was verizon. i thought it might be the government. >> make sure people understand the sarcasm here. >> i am sarcastic. i'm surprised to hear verizon be cited. >> it may be the federal code that precludes them from hiring a qualified company to do something, so they end one a canadian company -- >> it's important to save some money so go to canada. >> canada and verizon, shakes peern moment here for the government. as soon as you say that, where's nixon, he's going to come after you. but i do think there are problems here. there are real problems. it does matter. >> timed right to the bell. a little early here but we'll take it anyway.

we might take a look at the s&p at the top of your screen. maybe not. celebrating its ipo today, brixmor and at the nasdaq, from ireland, dublin -- i think somebody hit the button early. >> they go along and then there are a couple of boos for not well orchestrated bell ringing. i say john gray up there from blackstone who seems to be related with anything to do with real estate. he's a powerful man when it comes to real estate. blackstone being enormous. the funds there are bigger there than private equity. >> largest owner of single family homes in the country.

by brx is a need as well. >> in the meantime, ireland, turned it around. i know it's not thriving. spain talking about recession. i continue to believe one of the great theme for 2014 will be the turn in up. i think you want to own -- a charitable trust has a position in europe. you want a company in spain, in italy coming. france had been a country people were very worried about. that's where the action is. not the united states where the action is this. >> yes. we'll get up to speed on some of the individual movers. electronic arts is way out of the gate. for the time being let's get you back to washington and secretary sebelius. >> i'm not pointing fingers at verizon. i'm trying to explain the way the site operates. we own the site -- >> who is in charge, madam

secretary? >> the person now in charge is qssi -- >> who was in charge as it was being built? >> cme -- >> who is the individual? >> michelle snyder. >> michelle snyder is the one responsible for this deback scd? >> excuse me, congresswoman, michelle snide ser not responsible for the debacle. hold me responsible for the debac debacle. >> thank you, i yield back. >> i recognize the gentleman from the great state of michigan. >> thank you for your courtesy. i ask unanimous consent i be permission to revise and extend my remarks. >> without objection. >> i welcome the secretary to the room in which her distinguished father, former governor of ohio, served for so many years. i begin my questions by quoting

from an expert for whom i have enormous respect. he said as follows: as i mentioned earlier, the new benefits and implementation are hardly perfect. rather than trying to scare and confuse seniors, would i hope we can work together as we go through the implementation phase and find out what is wrong with the program and make changes and fix it. let us do it and do it in a bipartisan fashion. it is too big a program and too important to too many people to do that. having said that, it does appear it is working. let us admit it and not keep beating a dead horse. my beloved friend, mr. barton, who i think gave us the beginning of our efforts today. madam secretary, i've seen reports that consumers receiving plan cancellation notices from their insurance companies saying that plans are no longer available. does the aca require insurance

companies to discontinue the plans that people had when the law was passed? yes or no? >> not when the law was passed if the plans have not changed. no, sir. that's the grandfather clause. >> that's because the plans existed prior to the passage of the law are grandfathered in, as you have said? >> that's correct. >> if an insurance company is no longer offering a certain plan, that's because that insurance company made a decision to change their policies. and that caused them to take away their grandfather status from their insurance purchasers? >> that's correct. >> madam secretary, i want you to submit to the record statement of what it is we can do about insurance companies that run around cancelling the policies of their people. and i don't have time to get the answer but i wanted to get a very clear statement from you as to what you can do so we can take some skin off some folks

that have it coming. madam secretary, it's my understand being that these decisions of a business character are most common in the divisional insurance market and that much turnover already exists and existed prior to the enactment of legislation. >> that's correct. >> is that correct? >> yes, sir. >> is it correct that 35% to 67% of enrollees in the individual market leave their plan after one year for different reasons? >> a third or in about less than six months in the individual market and over 50% are in for less than a year. yes, sir. >> now, in the cancellation letters which are moved around from the insurance companies, some insurance companies are suggesting an alternative plan at a higher price. do they have the right to do that? >> they have a right to do that, sir, but consumers have a right to shop anywhere, to compare plans and they have choices now that they've never had before and some financial assistance

for about 50% of those people. >> and they have no right to enforce that demand on the insurance -- >> no one is rolled over into a plan. in fact, individuals for the first time ever will have the ability to compare plans, to shop and to make a choice inside or outside the marketplace. >> looks to me like the insurance companies are trying to inflict on their customers the view that this is their right and that this is the on option available to them; is that correct? >> well, i think that insurance companies would like to keep their customers. having said that, customers for the first time have a lot of choices because they can't be locked out -- >> but the insurance company has no right to enforce that rule on the customer. >> there is no rule that says you have to stay with your company -- >> the gentleman's time has expired. >> they have to right to come forward and tell you you have to buy a particular policy.

>> that is right. >> the chairman recognizes the gentleman from texas, mr. barton. >> before i ask me questions, we have a former member of the commit from the democrat side, mr. slatery, and we're glad to have you. and madam secretary, we're glad to have you, too. >> thank you. >> there is a famous movie called "the wizard of oz." there is a great line and dorothy turns to her little dog toto and says "we're not in kansas anymore." well, you're not in kansas anymore and some may say we're in the land of oz. most of those on the democrat side think those things are great. you apparently, although you did apologize and you have said it's a debacle, you also seem to think that the affordable care act is great. well, myself and others have a

different view. ultimately the american people will decide. last week when the contractors were here, i focused my attention in the apparent lack of privacy in the web site. if we'll put up the first slide that i had last week, if we can. this is what's public, madam secretary. it's a disclaimer that says any unauthorized to upload information or change information on the web site is prohibited. it doesn't say anything about privacy but you have to accept that in order to go forward with the application. the next slide shows what's not public. we tried to determine this morning if it was still in the course code butch it's been pointed out the web site is down. this is much more what i would

say frightening to me. it says you have no reasonable expectation of privacy regarding any communication or data transit stored on the information system. at any time the government may monitor, intercept, search or seize any information or data transiting or stored on the information system, any communication or data stored on this information system may be disclosed or used for any lawful purpose. were you aware of it and was it your responsibility to put this in the source code? >> mr. barton, i did not put things in the source code. i can tell you it's my understanding that that is boiler plate language that should not have been in this particular contract because there are the highest security

standards are in place and people have every right to expect privacy. >> all right. now, the last time we could check, this was still there. you're given almost unlimited authority under the affordable care act to administer it. will you commit to the committee and to the american people that, one, you do want to protect their privacy, and, two, you will take this out, fix it, make sure that it doesn't have bearing on people that try to apply through the web site? >> yes, sir. and we have had those discussions with cgi and it is under way. i do absolutely commit to protecting the privacy of the american public and we have asked them to remove that statement. it is there in error. it needs to be taken down and we should be held accountable for protecting privacy. yes, sir. >> thank you, madam secretary. i sincerely appreciate that and i'm sure the american people do, too. my last question or it's really a comment, i've introduced hr

33-48 which says let's make this system voluntary for the first year since we're having so many problems and let the american people decide. what that means is if people choose not to participate, they would not be charged the penalty for nonparticipation. would you support such a reasonable approach to this while we work out the problems in the system? >> no, sir. >> all right. that's an honest answer. >> the gentleman's time has expired. >> obviously some viewers want to see a lot of this, some viewers want to see a little less. we hope you'll stay with us as we try to capture the most important parts and keep our eye on the markets, too. speaking of the markets, s&p again record high at 1773. the dow being helped by nike among others? >> the du didn't confirm the transports the other day and i said the dow is not the dow.

meantime david and i were talking about gilead was up. david, is gilead going to be as large as big farma? >> we're talking about $106 billion market value, which is far above business toll myers at 87, almost twice eli lilly's market value but only $27 billion less than merck. >> changing the guard right now, right here. >> the ipo issues this year the three worst had all been health care issues. there have been some severe loses but i don't need to tell you about all the severe winners. >> let's use the analogy of ibm you asked about earlier. what company is buying back a ton of stock? merck. what companies are buying back

stocks in general? the pharmaceuticals? how does that affect a company like gilead that is spending its head off? they are not going to be dissuaded by the plight of the averages. they're looking at gilead and seeing what could happen in the out years and saying buy, buy, buy. >> the media stocks have benefited greatly. >> that's right. we ought to take a break. i feel like the whole show is being subsidized by the government, and verizon. that's a joke. verizon thrown under the bus earlier. i'm looking for bus companies. >> we'll take a break and get more from the hearing in d.c. in just a moment. because with power ports... and wi-fi... and in-seat entertainment, for everyone on board,

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33 record closes as of yesterday. we'll see if we make it 34 today. >> got a lot of consumer parts stories, the energy stocks are doing well. what's not doing that well, bank stocks. the bank stocks, huge part of the s&p. tech is intermittent but industrials have just been on fire. >> let's go down to the hearing. this is ralph hall, republican member for texas. >> 2014 to make sure that your testimony is correct, okay? i'm just joking with you. >> okay. >> were you born in kansas, mead, kansas? >> i was not. i was born in cincinnati ohio. i married a kansasan. >> i was in the third grade there and i thought i saw you on a tries california there one day. >> well, it was an illusion.

>> have you ever rejected a financial bill from one of the contractors? >> sir, our accounting office does a routine audit and review of every bill that comes in before they do it. do i not personally. i want to be very accurate about i don't personally pay contracts, negotiate contracts, by law and by precedent, that's really illegal for someone who isn't a warranted contract officer to engage in the debate or discussion around federal contracts. >> how much has the administration spent on the exchanges in total, not just healthcare.gov but all of the exchanges? >> sir, i don't -- >> how difficult is that figure to give me or if you can't give it to me? >> i would like to get it to you in writing very quickly. >> madam secretary, i'd like to talk, i don't know how much time i've got left but i'd like to talk about a couple of businesses in my district who

are struggling with how to move forward. one is in the manufacturing, one is in the pet boarding and training business. one has 85 employees, the other 56. here are quotes from their recent letters. the situation we're in is we would have to pay $170,000 of penalties in obama care. it's another california of texa government picking winners and losers, we are the losers. here are my options, do not pay the penalty, raise my prices and go out of biz, lay off employees who don't have to pay. and here's a quote from the other. since they're their high labor, low margin business, we're forced to consider bankruptcy, fire employees to get under 50

employee limit, close the location. we cannot escape many expenses such as rental agreements. >> sir, i think in the employer market about 95% of all american businesses are exempt from any kind of requirement to cover employer/employee insurance. they are outside the law, they continue to be outside the law but they will have some new options for those who want to cover their employment and new tax credit possibilities. for large employers, 96% already cover their employees. the penalty that you're constituents referred to is not a penalty that is imposed in 2014, it is being discussed with businesses about what kind of information is exchanged and it will take place -- >> i thank you. he's going to use the gavel on me if you don't hush. i yield back my time.

>> how much time -- the chair would recognize the gentle lady from california, miss eshoo. >> welcome, madam secretary. you're a distinguished woman, you have distinguished yourself and your state, the offices that you've held and now working for the american people and i salute you for it. i want to really congratulate my republican pals for being absolutely 1,000% consistent. you love what's wrong with the web site and you detest what's working in the affordable care act, and i think that that is on full display here. but let's get back to the web site because that's what the hearing is about. it's my understanding that november 31st is the -- is a hard date for having everything up and running.

>> now hhs did testify in september that they were 100% confident the site would be launched and fully functional on october 1st. that didn't work. do you have full confidence in this new hard date? >> congresswoman, i can tell you that the assessment that we have made is that it will take until the end of november for an optimally functioning web site. i know that the only way i can restore confidence that we get it right is to get it right. so i have confidence but i know that it isn't fair to ask the american public to take our word for it. i've got to fix this problem and we are under way doing just that. >> but are you confident that -- i think i said november 31st, which does not exist, but november 30th. you have confidence in november 30th?

>> i do. >> is there any penalty to qssi or cgi for not delivering on what they promised? >> well, i think the -- as you can see, we have an obligated funds for a contract. we certainly have not expended all those funds. and we expect not on the cms team but our contractor partners to fulfill their obligations and -- >> but if they fail to fulfill their obligations, i don't know what's in the contract, is there a penalty? >> there isn't a built-in penalty but i can tell you that paying for work that isn't complete is not something that we will do. qssi, as you know, has taken on a new role as integrator of the hub that they built and have in operation is working extremely well not only for the federal exchanges but all the state-based markets are using

the hub and that's why we had confidence in their ability to actually take this next role on and coordinate the activities moving forward, which have to be driven with a very clear set of outcomes, very accountable timelines and deadlines and they will be helping to manage that process. >> on the issue of security, there was a security breach that arose recently that i read about at any rate. and what i think is very important here because the issue of privacy has been raised and i think that that has been answered because very importantly there isn't any health information in the systems, but there is financial information. so my question to you is has a security wall been built and are you confident that it is there and that it will actually security the financial

information that applicants have to disclose? >> yes, ma'am. i will tell you that there was no a breach. there was a blog by a sort of skilled hacker that if a certain series of incidents occurred, you could possibly get in and obtain somebody's personally identifiable -- >> isn't that telling? isn't that telling? >> and we immediately corrected that problem so there wasn't a -- it was a theoretical problem that was immediately fixed. we are storing the minimum amount of data, it is using data at the irs and other places but

it is not storing that data. >> we'll give jim a few words before he has to leave to prepare for "mad money." >> starbucks -- we talk about elevated stocks. starbucks has moved up a great deal. they have to show china in good shape, have to show europe. could show it. i worry about facebook. it's a little bit of irony. rich greenfield updated it. i don't mean it be spiteful. i'm saying when you see someone who didn't like the stock at 25 finally capitulate, maybe it's a sign it's moving too far too fast. so charitable trust has taken some off the table. >> when you say "some" -- >> a third. you have to play with the house's money. you got to play with the house's money if you have it. i refer to carl icahn, knenetfl.

>> and i'm an old guy who just says -- >> not that old. >> i don't know, david. old enough -- >> what's on "mad" tonight? >> we have buffalo wild wings, a very hot stock. sally smith will be on. wing prices coming down. nick akins. everything is about coal versus nat gas and the epa. and then david wenner, it's been one of the biggest winners in the packaged web segment. it's been a quiet paercolateor, have to find out how this is going. >> hopefully by the time "mad" is on this will be over. >> and the revelation of verizon

being part of this i'm going to look into because i've been a big supporter of verizon for a long time. >> we'll be back with more "squawk on the street" in just a moment. ee fads... tdd#: 1-800-345-2550 ...you see opportunities. tdd#: 1-800-345-2550 at schwab, we're here to help tdd#: 1-800-345-2550 turn inspiration into action. tdd#: 1-800-345-2550 we have intuitive platforms tdd#: 1-800-345-2550 to help you discover what's trending. tdd#: 1-800-345-2550 and seasoned market experts to help sharpen your instincts. tdd#: 1-800-345-2550 so you can take charge tdd#: 1-800-345-2550 of your trading. [ sneezes, coughs ]

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who is in charge, madam secretary? >> the person now in charge is qssi -- >> who was in charge as it was -- >> cme was in charge. >> at that team who is the individual? >> michelle snyder. >> michelle snyder is the one responsible for this deback scd? >> excuse me, congresswoman, michelle snyder is not responsible for the debacle. hold me responsible for the debacle. >> the woman mentioned, michelle snyder, is the chief operating officer for the medicare and made ca medicaid services, by the way. >> those folks would be without any kind of health security. and in the private market what we know is it takes a real toll.

but i'd say the biggest issue is not just the financial toll, not the community toll, not the country toll, which is significant. i have a good friend who runs the cancer center at the university of kansas. i was with him and cancer researchers recently. and he said if you great cancer diagnosis, you are 60% more likely to live five years and beyond if you have insurance than if you don't. i think that's a pretty powerful statement for why we need affordable health care for all of our citizens. >> well, thank you. the republicans have not been able to defund or repeal it but they've raised specious arguments about death panels and socialized medicine and have worked to intimidate groups that can help the implementation efforts and to actively dissway

the uninsured from seeking coverage. how have these tactics impacted your act to implement the affordable care act? >> i don't think there's any question that a lot of people need a lot of information. i think it's one of the reasons we had millions visit the site, try to visit the site. it's why i am so frustrated and disappointed that the site is not fully functional and why i am so committed to getting it functional because clearly there is a demand. this is a law. this was a law passed by both houses of congress, signed by the president of the united states, upheld by the supreme court. the president was reelected, it is the law. and people have benefits and rights under that law and we've got to get that information so they can make good choices for themselves and their families. >> well, thank you. it is the law and frankly i find it disconcerting that my republican colleagues have done nothing but root for this law to fail for the last three and a half years.

now there's a big show here of being upset at problems with the web site of keeping people from signing up for coverage fast enough. i would just say to my colleagues on the other side of the aisle, you're really on the wrong side of history here. the web site will be fixed and millions of americans will be able to get quality affordable health insurance coverage through the affordable care act. and, again, i thank you for being here today, madam. >> mr. pitts. chairman of the health committee. >> welcome, madam secretary. have you personally tried to register or enroll on the web site? >> sir, i created an early light account so would i see the prompts coming to the people interested. i did work my way to the application feature fairly early on but frankly i have affordable health care so -- >> no, i was wondering if you've been through the process millions of americans are having to go through.

>> madam secretary, the initial web site crashes appear to be largely a result of the decision to prevent browsing of the plan. cgi federal testified at a hearing last week that they had designed the web site to allow users to browse and compare plans before having to create an account. miss campbell told twous two we prior to the october 1st launch they were told to turn off the browsing feature. were you aware in september that this decision was made? >> sir, i wasn't aware of that particular decision that was made by the cms team. i was aware we were pairing back some features to not put additional risk on the web site, which seems ironic at this point. >> who made that decision? >> administrator tavenner made that decision. >> and do you know why that was made? >> yes, sir. because we were anxious to get the web site up and running and

functional, which we clearly have failed to do to date, although i would suggest the web site has never crashed. it is functional but at a very slow speed and very low reliability and has continued to function. having said that, they paired down some of the features, feeling that it would be better to load them in later. one was the shop and browse feature, another was the spanish version of the web site and medicaid transfers. all three of those issues were paraed down in september to not overload the system. >> last week it was testified that cms was responsible for end-to-end testing and they believe months of testing would have been preferably to two weeks. double that two weeks was enough time to complete testing of the entire system? >> clearly not. >> and when were you made aware of the result of the test, including the one where the system collapsed with only a few hundred users? >> leading up to the october 1st

date, we had regular meetings with not only a team at cms but administrators involved. i was made aware that we were testing and as we found problems, we were fixing those problems. i think there is a cgi report at mid august identifying some problems and between august. >> in "the washington post" on october 2 1s there was an article that said about maub before the exchange opened, a testing group of ten insurers urged agent sy officials not to launch the site because it was riddled with problems. were you aware in september that insurers recommended a delay in the launch of the exchange in. >> i was not aware that they recommended delay. i know everyone was concerned that there were risks and there were likely to be problems with a brand new integrated insurance

system. i don't think anyone ever estimated the degree to which we've had problems in the system and certainly the contracting partners did not. >> and did hhs respond to the insurer's recommendation to delay the launch? >> sir, i can't -- i wasn't in the meeting. i don't know what occurred at the meeting and i don't know who they talked to. >> can you find out and answer that question for you? >> sure. i will get back to you. >> thank you, mr. chairman. >> mr. green. >> madam secretary, thank you for taking time to be here today. i represent parts of eastern north houston harris county and our district has one of the highest uninsured rates in the country. even worse, we have one of the highest rates of people who have jobs but don't receive their insurance through their employer. it's for this reason i believe houston would be a good place for to you come and spread the word about the tremendous benefits of the affordable care

act. i understand you're unable to attend because of your commits. we're in the state of texas that has the highest number of uninsured in the country. it's important to me and our constituents to get it right and that's why i share your and the president's disappointment the web site is not working as planned. november 30th is not soon enough. many of my consistents have been waiting for years to be able to purchase health insurance. we've been waiting for them to get it up and going. now we're hearing about cancellation letters being sent by insurance companies notifying them their plans are no longer offered. are they losing their coverage because of the affordable care act or is it because these plans were changed after the enactment of the act. >> i would say it's the latter. >> so if somebody in america had

an insurance plan before the act and the president was correct, if you have what you -- if you like what you have, you could keep it. the plans are changed -- >> they could either choose to be grandfathered and keep the same plan -- it allows insurance companies to charge medical inflation so they didn't have to charge the same price. they could increase co-pays and co-inn insurance. what they couldn't do is cancel benefits that the policyholder relied on, couldn't disadvantage the policyholder. if that plan is still in fengt, slot slotly. >> so these plans are not allow now because they're completely

inadequate, this don't offer the minimum ef sense benefits. ; is that correct? >> that is correct. >> and having been a state legislator and i know as governor in kansas, every society has some kind of minimum mandated health coverage that applies for their plans. >> they do but it refers 90% of the group market. this has always been the wild west. >> you can see the letters from their companies about cancellations. they're eligible to purchase on the exchange. >> or out of the exchange. they can go inside the exchange, outside the exchange, their insurers can offer them ambulance. >> and 80% of their premium dollar will come back to them. >> that's correct. >> i know it's into the true in texas but i don't know other states that had the 80% require

pentment. >> well, no state had it prior to the affordable care act. >> let me give you an example that i found out during casework a few years ago. a large company provided $25,000 maximum benefit for their employees in the year. most employees didn't know about it until this one consistent found out she had cancer. so that's some of those plans that are not being allowed to be sold now; is that correct. >> the plan will have a limit on a lifetime out of pocket cost and it will take away the notion that you would run out of your coverage in the middle of a treatment, which a lot of plans to. >> i know i'm out of my time. it's like biography a consider, if you look good but you don't have a motor, it's not going to get you very far. >> save a lot of gas but it

won't get you very far. >> you're out of time. >> you and i both know how important this issue is to all americans -- >> you've been listening to health care secretary kathleen sebelius testifying on capitol hill. when we come back, we'll talk to michele bachmann and get her views on obama care. we'll take a break. "squawk on the street" will be right back. before global opportunities were part of their investment strategy... before they funded scholarships to the schools that gave them scholarships... before they planned for their parents' future needs and their son's future... they chose a partner to help manage their wealth, one whose insights, solutions and approach have been relied on for over 200 years. that's the value of trusted connections. that's u.s. trust.

all morning long we've been watching the hearing in washington, d.c., the health and human services secretary

kathleen sebelius testifying on capitol hill. michele bachmann is among a group of house republicans calling for the resignation of the secretary. congresswoman, good morning to you. >> good morning. great to be on with you. >> i'm not sure how much you've been able to hear. the secretary has apologized. she has reiterated november 30 at fix. she has said to hold her accountable. any of that acceptable? >> i asked all of my staff to go to the web site and go through the process of signing up for obama care. the result is people were able to get a number on their premium, but they could get into details on the plan they were going to buy. they had no idea what their deductible would be, what the

co-pay would be or what was covered. they were also told there was no way to get out. they were told if they weren't sure to stop before they actually signed up. i don't see how in the world in is going to be fixed by november 3 30th. i agree with the white house. this is more than just a web site. if this roll-out is this bad on the web site, what's it going to mean for getting doctor appointments and getting actual health care that people deserve and need. and i think especially women are what i'm worried about because women make 80% of all the health care decisions in this country. it's women that i talk to every weekend with i go home. one woman last week, married 37 years, her premiums jacking up $2,000 this year but their deductible is tripling. this is a huge tax increase for their family, effectively that's what it is. the question is not just what is

kathleen sebelius going to do, what are the senators who voted for this bill, what are they going to do? because the promises they made to my constituents that they would save $2,500 a year on their premium have gone bust. it just the opposite. so the people that i represent come to me and say, our family can't afford this health insurance. >> so your complaints again center around the tenets of the law, right? this is not about accessibility to the web site, it not about the messaging that the president said, if you look your plan, you can keep it, those are ancillary in your view? >> those are fundamental but i even more than that. i think we're only at the threshold. for women across america, they won't be empowered, they're going to pay a lot more and get a lot less. i think that's a really bad

deal. one thing government isn't very good at is admitting it made a mistake and ending something that isn't working. that's why we got to put something out there. i believe the first step should be this needs to be voluntary. doesn't coerce people and force them to pay for a broadcast they have no interest in buying from a web site that doesn't work at a price they can't afford. give people options. i really believe women should be able to choose, choose the health plan they want, not be forced to buy a plate of dog food that doesn't work for them. let's what i'm getting behind. let's make this effort voluntary. there are people with problems with preexisting conditions, that fix is about a $5 million fix a year. i'm a fiscal conservative. i would personally write that check for $5 billion out of the u.s. treasury to solve the preexisting problem for americans across the country. no problem. but for all the people out there that have good working health plans right now, let them keep

it. they can't -- >> congresswoman, forgive me, i department mean to interrupt you. i'm slightly confused. you keep mentioning your own constituents. i believe your state set up its own exchange and had one of the lowest premiums in the country, is that not true? >> minnesota did set up its own exchange but when you go home every weekend and talk to constituents, again, a woman who has been buying the family health insurance for 37 years, her premium just went up $2,000 a year, which is pretty typical from what i'm hearing, and their deductible tripled. another man i talked to, 31 years old, has a baby and a wife, his premium doubled and

his deductible tripled. so smart people would really choose to not buy health insurance, instead pay the premium -- they buy it when there's a problem and just go to walk-in centers. that's the smart thing to do. >> i just wonder as a fiscal conservative whether you would not be of the view that all of the other people that pay federal tax should have their risk of having to pick up very large medical bills in the future from those that haven't insured themselves sufficiently or didn't take out insurance, isn't that good for us? shouldn't it say you have to be personally responsible for 60% of your prescription charges and indeed for other services that at the moment they're not covered for? >> but that's exactly what's happening now with the new restrictions under obama care. we're all being forced to pick up everybody else's health care bills. so all the others out there doing the right thing, they're

paying the biggest middle class tax increase in america because their premiums are jacking up, their deductibles are going away, they're paying more for their doctor visit. that is a middle class tax increase under obama care and i want to know what's the president going to do about that? what's al franken going to do about that? what's senator amy klobuchar going too do about that? >> last question, congresswoman. if the secretary hypothetically would were to resign today, as you have called for, would that be the end of your criticism? would you begin to let the law take effect and then if it fails in your view say basically i told you so? >> i'm not interested in political theatrics. that doesn't solve the problem for women in minnesota who are

receiving huge increases in their health insurance premiums. that's why i say the senators that made all these big promises, they need to fix it. so the other democrat senators that gave us this disastrous bill, they need too fix it and get on it and apologize because all the glowing promises they made are turning into, a, and they need to work with us and get a bipartisan solution so people in america aren't disadvantaged. we need to help people, not hurt them. >> i don't think we've talked about al franken in the history of our network. >> he was vote. >> we all remember. >> let get back to washington where the secretary continues to testify. >> no, sir, we do not have any

reliable data around enrollment, which is why we haven't given it to date. >> or have any data on how many people have tried tone role but bu because of the problems have not been able to -- >> no, sir. i can tell you i met with insurers last week and one of the priority fixes is the so-called 834s, the document that -- >> okay. >> that sends an individual's name to a company and verifies it. that is one of the systems that is not working. >> i appreciate that. and the contractors i asked specifically about the information of how many people have tried to enroll and enroll and they say they do have those numbers. but can't tell us that because of a contract with hhs saying that they're gagged on that information. >> i would suggest that the numbers are not reliable. according tos -- >> my question is going to be, though, will you on the record right now authorize them to give us those numbers and let us determine whether those are

reliable? >> no, sir. i want to give you reliable, con foufrmed data from every state and from the federal marketplace. we have said that we will do that on a monthly basis by the middle of the month. will you have that data but i don't want to turn over anything that is not confirmed and reliable and that's what we'll -- >> but that data out there exists. >> sir, i would tell you right now it is not reliable data. according it the insurance companies who are eager to have customers, they are not getting reliable data all the way through the system. ilt one of the real problems that we have. >> the number of people that have clibd on and try to get it and enrolled. i'm not asking what they enrolled in or whether they came in and said they were of -- that should be a reliable number. >> the system isn't functioning so we are not getting that

reliable data. insurers who i met with said that is the kate. we know there are 700,000 applications -- >> reliability of that data flies in the face of the testimony of the contractors. i yield back. >> miss capps. >> thank you, mr. chairman and thank you secretary seb eegus for proper presence here tonight and your testimony. while i, too, are frustrated with the rollout of healthcare.gov, i appreciate your long history of extending health care to americans. it important to know in my home state of california and other states as well the new exchange marketplace, we call it covered california -- >> we'll take a break here and get back to washington, d.c. in just a moment. this is "squawk on the street."

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stanley druckenmiller will be with us later. for now, let's get back to capitol hill. >> every we hear is that they see the same demand.

they are eager to enroll folks and that that is going smoothly. >> and what do you think the success shows about the demand and the interest for affordable health insurance on the part of constituents? >> i don't think there's any question that in spite of a series of roadblocks and blockades and a lot of information driven by a $400 million marketing campaign last year, americans are eager to see what their benefits may be under the law, how to get health insurance and security for their families and we want to make sure that they see those benefits. the web site is one of the ways to do that. the call center on the ground enrollment, personal outreach are a variety of ways. i would tell your colleague, mr. congressman, i'd be happy to get you the list of the nebraska folks on the ground. it's available easily, it's public record so i'd be happy to

share it to you so can you share it with your insurance commissioner and governor. >> mr. rogers. >> thank you, madam secretary, for being here. is it your testimony that every night to try to increase the functionality of the system you're hot swapping codes? my understanding is between two and four, write new code, put it into the system. yes or no? >> clearly i am not hot swapping code up. >> are in charge of the -- you're trying to improve functionality, right? >> no, i don't think it happens every night. it happens periodically during the hours of 1 and 5 but it is not a nightly feature. >> has each piece of that code introduced into the system has been security tested? >> each piece of that code has been tested? >> i should not -- i don't know. i can tell you that security --

>> that's a much safer answer, trust me. >> it's an ongoing operation as code is loaded, you need to retest over and over again. >> you need to test the code. >> have any end-to-end security tests been conducted since health carcare.gov went live? >> my understanding is there it continuous testing as our temporary authority -- >> yes or no. has an end to end security test on healthcare.gov went live, yes or no? >> i will find out what testing they're doing. i know they're doing simultaneous testing as new code is loaded. >> there are any end-to-end security tests run after every new pieces of code -- >> i can't tell you how it's done but i will get you that information. >> i can tell you they're not and i'din interested to hear why not. >> if you'd go to tab two in

your book. >> what book, sir? >> you have a tab there. if you go to tab two. >> right there. >> while you're looking i'll read. it's dated september 27th and it is to marilyn tavenner. "there are inherent security risks with not having all code tested in a single environment. finally the system requires rapid development and release of hot fixes and patches so it is not always available or stable during the duration of the testing. secondly, the security contractor has not been able to test all security controls in one complete version of the system. if you look in the first part, which is most troubling at all, it says "due to system readiness issues, the security control assessment was only partly completed. this constitutes a risk that must be accepted before the marketplace day one operations." so let me tell you what you did.

you allowed the system to go forward with no encryption on backup systems. they had no encryption on certain boundary crossings. you accepted a risk on behalf of every user of this computer that put their personal financial information at risk because you did not even have the most basic end-to-end test on security of the system. amazon would never do this. proflowers would never do this. kayak would never do this. this is completely an unsearchabunsearch ab -- unacceptable level of security. and we found out last week an end to end test, ongoing hot patches, the private contractor told us it would take a very thorough two months just for an

integrated end-to-end security test that has not happened today. why? because you're constantly adding new code every night to protect the financiunctionality of the . you have exposed americans because you all -- don't you think you had the obligation to tell the american people that we're going to put you in the system but beware, your information is likely to be vulnerable? would you commit today, secretary, to shut down the system and do an end-to-end security test -- >> no, sir. if you read the memo, it goes on to say weekly testing including interface testing daily, weekly scans are going on. this is a temporary authority -- >> that's not what the memo says, number one. number two -- >> mr. chairman, a point of order. i think the witness ought to be allowed to answer what was a speech by the colleague because

he's raised a lot of issues. >> in f the gentlelady -- >> there's been no other speeches here today? that's a shock. >> does the secretary wish to respond briefly? >> sir, i would say this document is a document signed by administrator tavenner, which discusses mitigation strategies for security that are ongoing and upgraded and an authorization to operate on a permanent basis will not be signed until these mitigation strategies are satifisfied -- >> mr. chairman, there are people using the system today -- >> mr. chairman, she didn't admit that. you said it but she didn't say it. >> gentleman's time has expired. mr. doyle. >> madam secretary, welcome.

those of us who fought for this law and voted for this law -- >> those are what you call some fireworks as the house committee continues testifying. we are in a bet of the weeds, talking about hot swapping codes, security risks as they rewrite that code as the fix continues. the dow is roughly flat, s&p is roughly flat as well. we're watching a lot of earnings come in. fed statement in just a few hours. our bob pisani joins us on post nine with a special guest. >> good morning. stanley druckenmiller is here. he's speaking on the subject of retirement. i want to get your thoughts on this. you have very passionate ideas about it. but first we have a federal reserve day. the fomc is meeting today. i want to get your thoughts on that. do you think right now that the fed made a mistake or not by deciding essentially to defer

the tapering process did they blow it given the fact that a lot of people down here feel tapering was already starting to be built into the market? >> i think they made a big mistake because i think if they had tapered in september, the market could have handled that, it would have been perfectly fine. it was an opportunity to scale back the program and not impact financial conditions. unfortunately, i think if they were going to taper now because it's been taken out, it would have a much more devastating impact on the markets now than it would have had last september. so i think they made a big mistake. >> what do we do from here? any thoughts on when you feel the fed might likely begin tapering? >> i don't see that happening for a long time for a um could of reasons. number one, if you look at where they were in their head with the economy last june, i think everybody's economic forecasts are lower now than they were then. the other problem is they've seen the trailer of the movie of

what happens when you do start the tapering. so i think what happened in june in the pullback has made it much, much more difficult for chairman yellen to pull the trigger than it would have been if we hadn't been through this entire saga. >> what is does the fed need to do at this point? what do they need to say? what comments do they need to make at today's meeting to help the markets, hurt the markets? what do you think is going to happen today? >> luckily for the country, i'm not running the federal reserve. but my guess is it's just going to be steady as you go. but i can't see them tapering for a long, long time because i don't agree to the consensus out there that economic conditions are going to get it better. when you're taking 13 billion in capital fromle largest bank in this country and more to come, what do you think that's going to do to lons and economic growth. all those fed models, they don't

have regulation in there. it's hard for me to believe you're going to get this big surge in the economy, which is what they clearly designed as something they need to taper. >> let me move on to the stock market. you have a very big position in google. do you still have a large position in google? what do you think -- >> google is still my largest physician. the only thing i've done is added a little afternoon the earnings came out. i think google has the greatest business model in american business, their search business. in addition, they have, in my opinion, this generation's thomas edison running the company, larry page. so you get, to me, maybe the greatest growth company in america and 19 times earnings, 11 times ebidta, with the option, you don't know what this guy is going to come up with. google car, google glass.

my guess is they have five, six things in that company that may be monetized. even if you didn't have that stuff, i think the stock is particularly well priced. you have this huge -- >> you have a very impassioned speech on what's going on with retirement. i've heard it. why is this an issue that concerns you now? what are you going to be telling people here today? >> i'm going to be telling people i think entitlements are great, the poverty rate has come down from 30% to 9% the last 40 or 50 years and i want to make sure that property rate stays down for nut wr forgets. these are future seniors the only way we'll get benefit for them is if we reform the system.

>> we all know that. what do you -- what solutions are are you going to propose? >> i'm not going to propose any solutions today. i'm going to shine a light on how unsustainable this situation is. >> we had damon silvers, the head of policy -- policy director for the afl-cio on the program about a week ago and he got a lot of headlines because he suggested that it's only the rich that argue for an entitlement reform. it those who fear taxes are going to go higher on the rich because of the unfair buffered. is that ultimately the trade-off that you could keep entitlement if you tabsed the rich more? >> the answer is no. if you put all the liabilities on the balance sheet of the united states, which just like enron we do not do, so we don't count any of the futures on the

balance sheet. if you put them on the present val usual the current united states debt would not be 17 trillion, it would be 205 trillion. if you were to raise the millionaires, all their taxes a thousand basis points, so raise it from 40 to 50, you'd raise $91 billion. $91 billion is not going to solve the problem. now, one of the things i've proposed and this might make the man from afl-cio happy, i don't know whether it would or not, i would like to see capital gains and dividend tax normalized, which takes warren buffett and mitt romney's taxes to 40% and all the rich elderly people, who by the way have five times the net worth of younger people and are clipping coupons, it takes their tax rates up substantially. but when you do that, i want to take corporate taxes to zero. they're stop building plants in puerto rico, they'll stop building plants in ireland, they'll stop gaming the system

through corporate welfare, which is done through the tax system, it simplify it is and we'll get growth. >> you recently came through the cross hairs of krugman. "he seems to feel me must warn about the looming threat of a financial crisis" t." the title was "addicted to the apocalyp apocalypse." >> why would i be wasting my time going around to these colleges if we were doomed? we are absolutely not doomed. there are solutions. there's a lien fuse on this thing and we can fix it. we are absolutely not doomed and that is not anywhere near my message. >> she's speaking here at the wall street conference right upstairs, which i'm moderating

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let's take you back to washington, d.c., the health and human services secretary kathleen sebelius continues his testimony. >> the mitigation strategy was put in place to make sure we had a temporary authority to operate in place while the mitigation was going on and then a permanent authority to operate will be signed. >> finally, do you have confidence in these and other measures you are taking to protect the security of americans' personal information? >> i do, sir. >> thank you. this is the third time you said it during the hearing and we believe you. thank you. what you're telling suss that these remedial actions and ongoing security testing are protecting the security of the

web site. that's a message that is important for the public to hear. my republican colleagues do not want this web site to work, i am convinced of that. they want to block the aca at all cost and even shut down the government to stop the law. for the last four years they have taken every glitch, every simple glitch and hiccup in the law and tried to exaggerate its significance and that's happening today and it's so disappointing. thank you, mr. chairman. i need back. >> dr. burgess. >> i would like to request that my opening statement be made part of the record for the hearing. and i also would like to submit my constituents' statements.

it just came to my attention on the cnn web site that the site was hacked just last week. and i will be happy to make this available to you. i don't think -- >> the cnn web site? >> the cnn ran a story healthcare.gov was hacked last week. again, i will get this to you and i would appreciate your response to that. mr. terry had asked a question about, he wanted to give the information about the number of people who signed up. you said you wouldn't provide that, because it wasn't accurate. would you provide us with the number of people who have been able to enroll on the telephone? the president gave an 800 number during his speech. could we get a number of people who have enrolled on the telephone. >> no, sir. we do not have reliable enrollment data. we'll have that to you by the middle of november, as we committed to. we are collecting state data. we are collecting telephone data. we are collecting paper data. we are collecting website data. we wanted to be reliable and -- >> you're claiming my time. telephone data doesn't seem that

difficult to compile, since the number is quite low. >> the telephone goes through the system. >> you have -- or the president designated -- i call him a glitch czar, jeffrey ziens, you're familiar to his -- >> i asked him to serve in this capacity, yes. >> many of us on the subcommittee of oversight investigations in energy and commerce were not as comforted by that selection, because if you recall his history with this subcommittee is not great. he was involved in solyndra. we asked him to talk to us about solyndra in 2011. he refused, requiring a subpoena to be issued by this subcommittee. will you commit to making him available to our subcommittee for questions? >> congressman, you are welcome to ask him to come before the committee. he is volunteering his services to us for a period of time. he has been appointed by the president to start in january as the head of the national economic council. he was the deputy director at

omb for management and performance. i am thrilled he is willing to take on this assignment and help us drive the management. >> again, his -- his appearance here will be important. now, a lot of people are asking if the president's words leading up to this law, if they matter. and the statement in the "washington post" today edited the president's statement, say, if you like your health care plan, you'll be able to keep your health care plan if we deem it adequate. that seems more like an operational statement, especially if you go back just a few years, into the federal register, and i'm quoting here from the federal register from july 23rd, 2010, just a few months after the law was signed, the rules -- the interim rule for dealing with the grandfathering written into the federal record, but new will you purchased individual policies are not grandfathered, the department expects a large population won't be grandfathered covering up to and

perhaps exceeding 10 million people. i hope the president was apprised of that before he made these statements, because clearly his statement wasn't operational. >> again, that's an insurance company choice, and that was a snapshot of what the market looks like. the president made it clear, and our policy was to put a grandfather clause in both employer-based coverage and in the -- >> in the register, those were the comments recorded. >> no, this isn't a government takeover of anything. these are private insurance plans and private decisions. >> i have to ask you. you serve at the pleasure of the president. we're all aware of that. but we've had many of your employees here in front of this committee, and you have to ask yourself, are they being purposefully misleading or are they really not that smart? so i'm going to ask you this morning for the sake of future health care in this country, would you please ask for the resignation of gary cohen, because he's repeatedly come to this committee and misled us? >> i will not, sir.

>> gentleman's time has expired. >> mr. chairman, point of personal privilege, the record should be clear about jeffrey -- >> let's pull away from the examination of kathleen sebelius. so some tough questioning there from congressman burgess of texas with kathleen sebelius. let's pull away for a moment and take stock of where we are. the house energy and commerce committee member and lee terry, of course, of nebraska, getting his turn to ask questions to kathleen sebelius this morning. he pressed her on the number of people who've tried to enroll on the federal site. take a listen. >> the contractors, i asked specifically about the information of how many people have tried to enroll and enroll, and they say they do have those numbers, but can't tell us that because of a contract with hhs saying that they're gagged on that information. >> i would suggest that the numbers are not reliable

according to the agency -- >> well, my question is going to be, though, will you, on the record right now, authorize them to give us those numbers and let us determine whether those are reliable -- >> no, sir. >> and representative terry joins us now live. well, it was a straight question, and you got a straight answer, sir. >> yes, i did. and it's troubling they won't release the data. this is a website with a lot of difficulties. she says it's functioning, yet we already know it's shut down. it's so riddled with problems. and what's troubling most for me is that these are the same people that are going to run health care, and they can't even get the website right. $600 million. >> which is the bigger issue, do you think, when we've moved on three, four weeks from now? the fact that there were these -- let's assume they're teething problems with the federal website, or the fact that the president said to people, if you like your health care policy, you will be able to

keep t and clearly, for hundreds of thousands of people across the country, as things stand at the moment, that is not the case. >> that is absolutely false, and the "washington post" said four pinocchios on this. i got a letter this -- or a text this morning from a friend of mine that text -- or did a picture of his termination notice from blue cross blue shield, and going into another policy in the exchange is going to be much more expensive with less coverage. so it's truly not correct. but this comes back to an issue of trust. you can't trust the website. you can't trust the people in charge of the website. now, we have it on the record that the president and katherine sebelius have given false information to the public. how can we trust them to run our health care? >> congressman, you tried to get some enrollment figures out of here. i can't imagine anyone thought you actually would. i wonder, do you think those figures actually exist somewhere, or is the website in such a state they really don't

have reliable information? >> they absolutely have their information. the contractors testified before our committee last week and testified that they have the number of people that have tried to enroll and have enrolled, but they can't give it to congress pursuant to a contractual gag order. i asked the secretary to repeal that gag order so they could give us, and she denies that. >> and did it make any sense to you -- we've been scratching our heads over her mention of verizon, really in the first few minutes of the hearing. >> yeah. >> what was she trying to blame them for? >> i actually tweeted about that. she actually said that verizon is at fault for these problems, because they didn't have enough servers. and that it is not the problem of healthcare.gov. so calling out verizon in her statement was stunning, and then we learned that verizon simply followed the contractor they were given by hhs. >> i guess we should be

following your tweets more closely. congressman, obviously, still a lot more to come in the next hour. thank you for your time. >> hey, thank you. >> congressman lee terry joining us from washington, d.c. we'll get some more of the secretary on capitol hill when we come right back. bny mellon combines investment management & investment servicing, giving us unique insights which help us attract the industry's brightest minds who create powerful strategies for a country's investments which are used to build new schools to build more bright minds. invested in the world. bny mellon.

who is in charge, madam secretary? >> the person now in charge as an integrator is qssi -- >> who was in charge as it was being -- >> cms was in charge -- >> at that team, who is the individual -- >> michelle snyder -- >> michelle snyder is the one responsible for this debacle? >> well, excuse me, congresswoman, michelle snyder is not responsible for the debacle. hold me accountable for the debacle. i'm responsible. >> okay. >> that is health and human services secretary kathleen sebelius taking the blame on capitol hill, as they pepper her with questions about the word glitch. the webside, of course, healthcare.gov. michelle snyder is the chief operating officer for medicare and medicare services. another player being pulled in. a lot being talked about.

the secretary reiterating november 30th as a fix for the website. let's get you back to washington, d.c. >> can an individual apply for a hardship exemption from the individual mandate on healthcare.gov? yes or no? >> i don't know -- >> i do, it's no. on october 15th, politico reported that if the online system is rickety, the system for getting out of the mandate doesn't even exist yet. hhs says it will take another month, at least, for the administration to finalize the forms for the hardship exemption from the individual mandate. why has it taken 3 1/2 years to finalize a simple application form for an exemption from the individual mandate? >> well, sir, as you know, the individual mandate is not in place until next year. we have made it very clear that if somebody is medicaid-eligible in a state that doesn't choose to -- excuse me, they will be --

they will be -- [ overlapping speakers ] >> -- people in the individual market have or will receive cancellation notices stating their health insurance coverage does not meet minimum coverage requirements of the affordable care act. the bill specifically grants you, madam secretary, the power to determine the criteria for hardship exemption. will you provide all of these individuals a hardship exemption since the affordable care act is taking away their plan? will you do that? >> no, sir. and i think those numbers are far from accurate. 95% of americans who have health insurance will be in a continuous plan -- medicare, medicaid, employer-based, v.a. -- 95%. a portion of the 5%, a portion of them, about 12 million people, a fraction of those 12 million, will have a plan that doesn't meet the criteria and has not been grandfathered in.

they are indeed receiving notices. many of those individuals, half of them, will be eligible for financial help getting a new plan, and they have many more choices in the marketplace. so we will not have a blanket exemption. >> sounds like a hardship to -- >> gentleman's time is expired. mrs. christianson. >> thank you, mr. chairman. and thank you, madam secretary, for being here, and thank you for the -- all that you and your staff at hhs has done in implementing the affordable care act to ensure it would provide the many benefits to children, to women, to medicare beneficiaries and to insure security to those who already have insurance, as well as lower costs. of course, the biggest complaint has been about the application and the enrollment website, but we have heard over and over from you that those are being addressed. but you would recall, and i know my colleagues would recall, congressman rush and i have always been concerned about

those who do not have internet access, those who are uncomfortable using the internet and would not use it. i just wanted to remind everyone that there are other avenues for enrolling, either by telephone or by paper, either alone or with the help of a certified, you know, application assistant. but my question goes to one of the rumors that's been circulating. there are many rumors about how the affordable care act has affected part-time workers, and some of my colleagues on the other side claim that the companies are moving workers to part-time jobs because of the health reform law and low-wage workers are being detrimentally affected. i understand why these claims are being made. it's just another part of the ongoing effort to undermine the law. would you take a few minutes to just set the record straight on the part-time issue? >> certainly.

95% of businesses in this country are small businesses, under 50 full-time employees. and there is no responsibility that any of those employers have to provide health coverage for their employees. on the other hand, there are now tax credits available for some of the smaller employee -- employers who want to offer coverage, to actually come into the marketplace. for the other businesses -- the businesses hiring 50 or more -- there is a standard that says an employee is considered full time if he or she works 30 hours a week, and that really came from a market snapshot with health from the small business administration of where employee benefits were in the private market based on hours of work, what was a part-time or a full-time employee. what we know about the economic

data is the high point of part-time workers was in 2008 and 2009 at the height of the last recession, it has been decreasing each and every year. there is no data to support the fact there is an up tick based on the impending affordable care act. i am sure that there may be some individual employers making some business decisions about how many workers they want full time and how many part time. but i can tell you there is no economic data or employment data that supports the notion that this is in effect of the law. >> so, in fact, it's my understanding that part-time workers are at the lowest percentage of workers in many, many years right now and -- >> well, and for the first time, as you know, congresswoman, part-time workers will have options for affordable health coverage. they've never had that before. >> absolutely. >> they've never had options in the marketplace.

they've never had some health-purchasing coverage for themselves and their families. their full-time colleagues have, but they have not. they will have options. >> and just to be clear, i had another really long question, but the last part of it, it would be fair to say that at every opponent along the way, you expected this website to work based on everything that you had been told by the contractors up until that point? >> well, i expected it to work, and i desperately want to get it working. >> more than anyone else, i am sure. >> -- how frustrated i am, and we are committed to fixing it. and the only thing that i think builds back the confidence of the public is fixing it. >> thank you. >> time has expired. mr. scalese. >> thank you, mr. chairman, for holding the hearing, and thank you, secretary sebelius, for being with us. last week, when the contractors were here, i asked them under oath if they had delivered the system they were contracted to build. all four answered yes. i want to ask you, did the

contractors deliver the system that you contracted them to build? >> i don't think i can accurately answer that question. what we know is we have a system that doesn't function properly. >> we definitely know that. >> as we fix things, we will know more about what is broken along the way, and i'll be able to get -- >> -- somebody in your office oversaw the implementation and received the product. >> that's true. >> they said this is the product we contracted and paid hundreds of millions of dollars to build, or it wasn't? does somebody in your office have the ability to -- >> well, i think that we can say that the products tested individually, verified individually -- functioned, clearly they don't work well together. >> well, i used to write programs for a living. i develop software products for a living. if you're developing an integrated system, it's irrelevant if one isolated component works by itself. when you plug it in together, it doesn't work, that's a system that doesn't work. one of the questions i had and others had, somebody in your agency made a decision weeks --

literally weeks before the deployment to change the system. instead of going from a browser ability, where somebody just like on kayak, or like on amazon.com, could go shop for products, look at prices before they purchase, which is how consumers are used to doing this, y'all made the decision to change it around and gather their information first before you could let them see prices. was that you who made that decision? >> no, sir. >> was that ms. tavenner. >> it was ms. tavenner and a team who looked at not imposing additional -- >> did that team make the decision, because they knew once people actually saw the prices and were getting reports from all of the constituents of dramatically higher prices than what they were expecting, did you make the decision because you knew that when they saw the prices they might not want to buy the product, so you wanted to gather their information first? >> sir, first, i did not make the decision. i was informed about the decision. we did -- >> did you agree with the decision? >> -- did a rolling off a number of features, and they can see,

there is no requirement -- >> look, i spent over two hours to get into the system. i never got to a point where i could see a price, and i got the blank screens other people got. i want to share stories with you from my constituents, because we started a page on our -- on facebook and twitter. we are collecting what's called share with me. and we're getting stories from my constituents. i want to read you few of them. randall from mandeville, my health care premium went over 30%, $350 month increase. michelle from slidell, insurance premiums are going up $400 a month, and our deductible has increased. and then shawn from covington who said, my current plan through united health care is no longer being offered in 2014 due to obama care. in fact, i received a letter stating that the new health care law was the reason for the removal of my current health care plan. madam secretary, what would you tell shawn, who liked his plan, and now has lost it, and he was promised by you and the president he'd be able to keep

that plan, what would you tell shawn now that he's lost his plan? >> i would tell shawn to shop in the marketplace and out of the marketplace -- >> do you really think -- >> -- if shawn -- again, if united chose not to keep shawn's plan in effect for shawn, the plan that he -- sir. the law said if you keep shawn's plan in place, if he liked his plan, if you only show trend lines to shawn, then the plan is still there. >> you and i may disagree over who you work with. i work for shawn. you work for shawn, madam secretary. he lost his plan that he like. there are thousands and millions of shawns throughout this country that lost the plan they like, because some bureaucrat in washington said, "we think your plan's not good enough," even though you like it, even though you were promised you could keep it, you're now not able to keep the plan. i think you deserve to give shawn a better answer, shop for something else even though you lost your plan. >> the gentleman's time is

expired. mr. inerny. >> thank you, mr. chairman. thank you, madam secretary. >> we've been following the testimony of secretary sebelius on capitol hill. we will take a short break. the dow up barely five points. don't forget a fed statement coming out in a few hours. the market is settling into a zone. the s&p up about a third of a point. "squawk on the street" will be right back. [ female announcer ] who are we? we are the thinkers. the job jugglers. the up all-nighters. and the ones who turn ideas into action.

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let me say directly to these

americans, you deserve better. i apologize. i'm accountable to you for fixing these problems. and i'm committed to earning your confidence back by fixing the site. >> i want to get some more reaction this morning to secretary sebelius on the hill. howard dean is the former democratic governor of vermont, also a licensed physician, as you know, a cnbc contributor. governor, good morning. john kingsdale oversaw the implementation of romney care in massachusetts, as the executive director of the health insurance connector authority. he joins us this morning, as well, on a day when the president will make his way to boston. governor, let me ask you as the resident democrat here, how's she doing? >> she's doing great. the hearings are theater. they're not designed to get information. they're designed to show off to the various constituent. i think kathleen's pushing back well, and she's not putting up with what really is kabuki. >> kabuki, there are some who believe, john, there is an element of that here, clearly from the right side of the screen, as we watch her address the republicans.

what is the most substantive thing you've heard today. she's not given us enrollment figures. she said november 30 continues to be the target for the fix. what's important to know? >> well, i think it's important to keep some perspective here. this is a marathon, not a sprint. and there are really two campaigns going on -- one is the political campaign that the governor just referenced. the other is the enrollment campaign, which is the serious business and is very important. but that's even a cbo estimate suggests it's a three-year effort, not a three-week efrtd. -- effort. all of our experience in massachusetts, as the model for national reform, was it took years, not weeks, to enroll folks. this is a hard decision and a push-sell if you will. and the important thing is to get this -- the technology up and running in the next month or so so that folks who need coverage can find and shop for what they need. >> that's a good point. governor, what is the president going to say in boston? how do you allay some of the concerns if, as john says, the

proof in the pudding is going to be months if not years in the making? >> well, i mean, there is going to be somewhat of a rush. i think, and obviously mr. kingsland would know this better than i, i think the number of people who signed up in the first month or so for when romney care went into effect was in the hundreds, and in the end, they got 36,000 people, and they got -- they got 98.5% coverage, which is pretty good. this system is essentially the same. obviously, the technology is not working the way it should. i think the most important thing that's been said in the last few weeks about all this is that, quote/unquote, the guarantee that this would be mostly fixed by december 1st. i can't imagine the administration didn't think long and hard before making that promise, because if they don't -- if they can't keep it for whatever reason, that's going to be a pretty big embarrassment. the rest of this is pretty much theater. and i think the american people know this is theater.

and, you know, even though it's kind of fun to watch the back-and-forth, there's not a lot of substance in this hearing. >> yeah. governor, you've said, at least the other day on abc, it is not true that if young people don't sign up, that the program doesn't work. is that what you meant to say? >> yes. you know, we're going to have a difference of about -- of opinion about this. i do not believe that an individual mandate is necessary for this to work. the reason i don't believe that is 20 years ago, we did actually more than what's in obama care. we have universal health insurance for kids, we did that through a medication expansion, and made medicaid a middle-class entitlement for kids under 18, and then guaranteed issue. the rate ban, a technical term for how much more you can charge for the oldest, sickest patient, versus the youngest is 300% in the senate bill. it's 20% in our bill. so we have really tough community rating. we don't have an individual mandate. and it works very, very well.

it's not perfect, but it works really well. >> john, people are trying to square the governor's view with how insurance generally works, that spreading out of risk. how can this work if young people don't join? >> well, i think that we do want to get everybody covered, including the young who may not think they need it, but they're only an auto accident or a step off the curb away from needing it. and folks who know they need it. the governor's right in one sense that the immediate impact not getting all the young people in that the obama administration and those who designed the law would like to. in the first year, frankly, it's a hit to insurance company bottom lines. it's not -- >> right. >> -- it costs the federal government less to have fewer people insured. the key, though, is to get them in in subsequent years, so that the carriers don't rate up for everybody who is in. >> sure. >> as a result of not getting them in.

so again, we have a little time to get this straightened out. >> try telling that to some members of congress. [ laughter ] governor john, thank you for your insight, it will be a long process, watching this get implemented if, in fact, it does well. thanks very much. we have been following the testimony of the secretary on the hill. we'll take a short break. the dow again within a narrow range. we're back in a minute. it's a growing trend in business: do more with less with less energy. hp is helping ups do just that.

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the secretary answering questions from bruce bailey of iowa. >> -- i would suggest it was also a function of trying to make sure we had the highest security standards, that we were not cavalier about someone's personal information being able to be addressed and attached, and it was a functionality that didn't perform properly but does now. >> one of the things that keeps coming up, because you are from kansas, is references to the

"wizard of oz." people went to see the wizard because of the wonderful things he did. the affordable care act is doing great things in iowa. "des moines register" say iowans buying insurance will face some of the lowest premiums in the country. it's increasing competition in our state. iowa consumers are able to choose from 40 health plans in the marketplace. you've mentioned the growth of health care spending is at the slowest rate in 50 years. 50,000 iowa seniors have received prescription drug rebates, bans on pre-existing conditions are allowing people to get coverage and switch carriers. and now, insurance premium increases are subject to review and can be rejected by the people reviewing those plans. but all of these good things don't mean anything unless we solve these problems. and what i need to know is how confident are you that the problems will be fixed by december 1st? >> well, again, congressman, i

have committed to that date, because that is the assessment of both inside and outside experts, who've analyzed, and they kicked at all the tires and looked at the system. i know there's no confidence in that date until we deliver on the date. i'm well aware of that, and that's on me. >> since americans were supposed to have six months to sign up, would you support insuring they still have six months by extending the open enrollment period for two more months? >> at this point, congressman, they will have a fully four months of fully functional, always, to sign up. and again, there are alternate ways, and the website right now, that people are getting through. the open enrollment period is extraordinarily long. it's about six times as long as a typical generous open enrollment period. and it's important for the insurance partners to know who

is in their pool so, again, they can stay in the market next year and know who they're insuring. so we think that the timetable will allow people four months' time to fully use the website. they can use it right now. they can use the call center. they can go to navigators. they can enroll. >> gentleman's time is expired. mr. harper? >> thank you, mr. chairman. thank you, madam secretary, for being here today. i'm sure there are other things you'd rather be doing, but we welcome the opportunity to have this conversation. i'm going to ask the clerk to bring you a document for you to look at so i can ask you a couple of questions. if you can go to page 8 on that, i have highlighted an item there. but this is a copy of a cgi slideshow from october 11, discussing technical issues that must be addressed within the website. and on page 8 of what i've handed you, cgi recommended that

cgi and cms have a review board to agree on which issues can technically be solved and which should politically be solved. was such a review board convened? >> sir, i cannot tell you. i've never seen this document, and i'm not aware of this recommendation. >> but cgi is responsible for the website, correct? >> cgi is responsible for the application. >> for the application. >> yes, sir. >> does it surprise you that in a slideshow that they gave in october 11th, they acknowledged political reasons for -- >> sir, again, i've never seen this document. i have no idea what that means. did you ask cgi when they came last week? >> can you find out for us if such a review board was done, and if any decisions were made on political reasons or on the other reasons and find that out for us? >> sir, that question needs to go to cgi, but i can -- i can ask them to report to you. >> well, if you would do that -- >> this is their document, if i

understand it, this is not our document. >> would you turn to page 9 of that document, please? and it states challenges on page 9 in this presentation by cgi, and it says under challenges, unable to determine at this time whether low enrollment counts are attributable to system issues or due to users choosing not to select or enroll in a plan. so those are two completely different issues, obviously. if is a system issue, that's something you have confidence at some point will be resolved, correct? >> yes, sir. >> and if it's a user-selection issue, that's an entirely different story, is it not? >> yes, sir. >> okay, now, you know, when you use the phrase earlier about a "punch list," that's like having somebody move into a house, someone's buy inging a new hous and they're told it will be ready to move in october 1st, load up the van, come in, and they get in, and it's not

finished. part of the plumbing is not right. the wiring is wrong. and they go in. this creates the situation where, you know, we -- health care shouldn't be a zero-sum game. i mean, we want to be fair to everyone. we want to help people who are vulnerable. but at the same time, we shouldn't have to hurt folks. we've got people in my district, in my state who are getting notices of cancellation. they're being told of higher premiums that they're having. and these are great concerns that we have. and how do we work through that? and i want to say, i appreciate you accepting responsibility for these initial rollout failures that we've had. but who is ultimately responsible? it is the president, correct? >> for the website? >> the president -- the president is ultimately responsible for the rollout, ultimately. >> no, sir. no, sir. we are responsible for the rollout. >> but who do you answer to? >> i answer to the president. >> all right.

so is the president not ultimately responsible, like a company ceo would be? >> sir, he's the president of the united states. i have given him regular repo s reports, and those i am responsible for the implementation of the affordable care act. that's what he asked me to do, and that's what i'll continue to do. >> so you're saying the president is not responsible for hhs? >> sir, i didn't say that. >> okay. so the president ultimately is responsible -- while i think it's great you're a team player and you're taking responsibility, it is the president's ultimate responsibility, correct? >> you clearly -- whatever, yes, he is the president. he is responsible for government program. >> my time is expired. >> gentleman's time is expired. mr. luhan? >> mr. chairman, thank you very much. >> and that game continues. we're following the testimony of hhs secretary kathleen sebelius on capitol hill. we'll take a short break here. the dow beginning to fade a little bit, now down some 24 points. we'll be right back. ask me what it's like

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we take you back to the hearing and kathleen sebelius on capitol hill. >> i'm not sure there is hands-on work that you can do. maybe we have some technical expertise. but i would say getting getting accurate information to constituents is helpful. knowing people can check out the facts and the law, that they may be entitled to financial support. that cancellation of policies means the policy that they had may not exist, but they have a lot of choices of new policies

and a law that now says they must be insured in a new policy, that they don't have to be insured by their company at a higher price. >> i appreciate that, madam secretary. going back to the individual marketplace, madam secretary, did this congress in previous years before the affordable care act make it illegal for health insurance companies to raise rates on someone after they submitted a claim for going to the hospital or becoming sick, or getting rid of pre-existing conditions? >> no, sir. >> madam secretary, one last note here. it seems that we've received some horrible news that there are bad actors already taking place of fraudulent websites to imitate the health care exchange or misleading seniors into disclosing their personal information. i've signed on to a letter to you led by my colleague representative raul ruiz out of california to request you prioritize fraud prevention efforts. what's the administration done to prevent the fraudulent act? >> i can tell you, congressman, the president felt very strongly

that that needed to be a part of the outreach effort, which is the attorney general and i convened states attorney general, insurance commissioners, the u.s. attorneys, and the justice department and the federal trade commission, which has jurisdiction to make sure that we, first, got out ahead of some of this developing consumer outreach. no one should ever give personal health information. because personal health information is not needed for these policies any longer. that's a red flag. we want to make sure that people turn over potential fraudulent acts. we have put training in place for navigators. we have our law enforcement -- >> gentleman's time is expired. i would just note that we -- with the indulgence of the secretary, we're hoping that we request have all members ask some question, but we know with four minute, we'll have a little trouble. i'm going to ask unanimous consent we try to limit our questions and answers to no more than two minutes, and i've

talked to mr. waxman but -- is that okay? because otherwise, we will -- there'll be a lot of folks who will not be able to ask a question at all. >> mr. chairman, i would submit to, if the questions again submitted, we would be happy to provide timely answers, also. >> okay. >> to make sure -- >> can i do that? so with that, we'll try two minutes. mr. lentz. >> i guess i've won the lottery on the two minutes. [ laughter ] madam secretary. >> time is expired. no good. [ laughter ] >> 20 seconds, mr. chairman. on the website, madam secretary, the contractors testified last week that they needed more than two weeks for end-to-end testing. why, in your opinion, was there not more than two weeks? >> again, we had products, the insurance policies themselves by

companies, were loaded into the system, so we could test up until then, but it wasn't until september, mid-september that that was done. again, the contractor said we would have loved more testing time, but we think we're ready to go ahead. >> i believe that will ultimately be a dispute between cms and hhs and the contractors, and if there's anything we can do regarding that, because, obviously, that didn't work, and i had thought given this as the signature issue of the president, that the website would be ready. number two, in my judgment, the president's statements were overstatements. the four pinocchios is an indication of that. there's a report in the new jersey newspapers this morning that 800,000 people in new jersey who purchased their policies in individual or small employer markets will be affected by that. in a previous question, it was mentioned that in an individual market you would be able to keep

your policy, grandfathered. yet regulations issued by hhs say that grandfathered status would not be continued for so much as a $5 change in a co-pay. is that accurate, and do you believe that that is a significant change? >> sir, we gave, i think, in the grandfather regulations, a guide for how pricing could change, medical inflation, and i think it was in most cases plus 15%. there were some individual consumer outfacing issues that were more rigid than that. but i would say that in terms of having companies being able to collect a profit margin, that was certainly built into the grandfathered status. >> i think that's too little a change, respectfully. >> the gentleman's time is expired. mr. tonkle? >> thank you, mr. chair.

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the most free research reports, customizable charts, powerful screening tools, and guaranteed 1-second trades. and at the center of it all is a surprisingly low price -- just $7.95. in fact, fidelity gives you lower trade commissions than schwab, td ameritrade, and etrade. i'm monica santiago of fidelity investments, and low fees and commissions are another reason serious investors are choosing fidelity. now get 200 free trades when you open an account. >>. >> so you're saying the president is not responsible for hhs? >> sir, i didn't say that. >> okay. so the president ultimately is responsible -- while i think it's great you're a team player and you're taking responsibility, it is the president's ultimate responsibility, correct? >> uh -- you clearly -- whatever. yes, he is the president.

he is responsible for government programs. [ laughter ] >> just a taste of the hearing as kathleen sebelius continues her testimony on the hill. we take you back there live. >> that said, i get a letter from someone in my district, adrienne. she says oh, she lost her coverage, she lost her coverage because spousal coverage is gone. she's gone on the exchange, she doesn't qualify for a subsidy. but that her premium and out-of-pocket costs under any plan is $10,000 a year. she feels -- she writes this -- she feels betrayed by her government. now, she has to sit there asking herself, is this fair? if you were she, do you think that this would be fair? >> dr. cassidy, i want to start by the amount that you gave is not accurate. i was told it was $5, not a dollar. >> that's for the co-pay, not the co-insurance. for the co-insurance, it's any amount. i have limited time. do you think that it's -- if you were she, if you were adrian, do you think this is fair? loses the spousal coverage, 10k,

no subsidies? >> sir, i don't have any idea what she's looking at. i can tell you again, that based on what we've seen in the market, what we've seen in the plans, people will be getting full insurance for the first time, and -- >> well, again, this is what she reports. do you think it's fair -- if what she reports is true, do you think it's fair? >> i can't answer fair or not fair. i don't know what she was paying -- >> okay. >> -- did she have full insurance? >> richard writes his daughter received a note that his premium's going up because she's being lumped with older, costlier patients. it's possible the only people that sign up will be those who are more costly. does hhs have plans on what to do if only those are more costly sign up and premiums rise for everybody? >> i think, sir, that's what we're trying to do to make sure that -- [ overlapping speakers ] >> -- do you have plans -- >> that's the importance of the individual mandate that you've just outlined. getting rid of pre-existing conditions, making sure that --

>> -- costly signup, do you have backup plans? >> we will encourage others to sign up. that's why there's a penalty in place. >> does this assume there -- >> the gentleman's time has expired. mr. yarmouth. >> thank you, mr. chairman. madam secretary, nice to see you come to this perspective -- hearing with different perspective. in kentucky, we're doing develop. 59,000 have started applications. 31,000 are now fully enrolled. and new coverage and 5,000 just in the last week. and i think very importantly, more than 400 businesses have begun applying for their employees, as well. so the idea that somehow this is going to be bad for businesses is not borne out in kentucky. would it be safe to say if 36 states had done what kentucky and new york and california had done, instead of 14, that the rollout would have been much smoother and the website would have been much easier to construct? >> well, i don't think there's

any question that the, you know, in january of 2013, we knew how many states were not running their own website, and i think mid-february, we learned about partnerships. so it was not until that point that we learned that 36 states would actually be coming through -- having said that, we should have anticipated, we should have planned better, should have tested better. that's not any excuse, but we clearly are running a very different vehicle for enrollment than we thought we were going to run in march 2010. >> right. on the subject of cancellation of policies. isn't it true that, first of all, the federal government can't require insurance companies to sell insurance? >> that they can't -- >> the federal government can't require them to sell insurance? >> yes, that's true. >> insurance companies are making very difficult decisions about where they want to participate and where they don't, and in some market, they're trying to get out of the

market, cancelling people, because they want to play in other markets and so forth. they're all making those decisions now. >> and we know we have more insurers -- 25% more insurers in the individual market then we did prior to the law being passed. >> right. so a lot of dynamics going on here that are not necessarily an indication that the president misled anybody. there are business decisions being made all over now. >> well, and cancellation of policies, again, that one-year contract notice, is a routine in the individual market. it has been in place for years. and for a lot of people, they are policies now -- they're being cancelled because they're being notified you can no longer be medically underwritten. we can't charge you more because you're a woman. we won't ever have the kind of limitation on what your policy can pay out, or charge you exorbitant out-of-pocket rates. those policies will cease to be offered in the marketplace. >> gentleman's time is expired. mr. godfrey?

>> thank you, madam secretary, for being here. and last week, mr. lao was srco, using paper application, with the phone, and what he said with the phone, they take the paper applications and enter them in the web portal. i know you have the issue of logging in and logging off. there's issues with the data, in the web portal, you can't get reliable data. he also said because of the surge of paper applications, it's six to eight weeks to process. so if november 30th is when this will be ready that they can use, even if you do it now, eight weeks, getting close to january 1st, and somebody does lose their insurance, so they're signeding up for this, and they get to january 1st, even though a march 31st enrollment, is there a contingency plan for the people to continue their insurance? >> sir, i think we have improvements every day on the

speed of the site. srco was giving you early snapshots of difficulty of accessing the site. i think that's greatly improved -- >> they said just processing the paper, actually. >> i understand. it is the site for -- they put the application into the site and get a determination. that's part of what the process is. so the site is part of the portal all the way through. >> right. >> this is integrated insurance vehicle. so that will improve, and we, again, with four months of continuous service, which is far longer than most people had, some of these cancellation numbers, mr. garrity again pointed this out for florida blue cross, but it's true of everyone else, these are not january 1st numbers. they are year-long numbers. so over the course of 2014, when an individual's policy is due to expire, that individual will -- >> but somebody's could expire january 1st and not be able to get coverage, if the website

is -- and the vendor said they needed months to test. they would have liked months and months to test. that's what they said. even if it works -- >> i would say we're testing as we go. this is beta testing going on right now. that's why we're fixing it and how we identify things. people are getting through every day. and we now know a lot -- >> and the paper process, if it does take even four weeks, it's november 30th, people's cancelled on january 1st, there needs to be a contingency for the person. >> typical insurance is two to four weeks. they will have two full months of signup. >> the gentleman's time has expired. >> thank you, madam secretary, for bringing to millions of americans -- >> continued questioning of secretary sebelius. the market has reached its session lows, the s&p down 5 points ahead of the fed decision in a few hours. "squawk on the street" will be right back. americans take care of business. they always have. they always will. that's why you take charge of your future.

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on the most highly recommended bed in america? ask me about my tempur-pedic. ask me how fast i fall asleep. ask me about staying asleep. [announcer] tempur-pedic owners are more satisfied than owners of any traditional mattress brand. tempur-pedic. the most highly recommended bed in america. now sleep cooler with extra cooling comfort on our bestselling tempur-breeze beds. visit tempurpedic.com to learn more, and find a retailer near you. we are nearing the end of secretary sebelius' testimony, but before it ends, let's get the tail of it. back to d.c. >> -- and since then, there's been user problem after user problem after user problem. regarding healthcare.gov, your deputy administrator, gary cohen, testified one month ago, right where you're sitting, that cms has worked hard to test the

infrastructure that will allow americans to enroll in coverage confidently, simply, and securely, end quote. yet, according to "forbes" and "wall street journal," you told them that you needed five years of construction and one year of testing. the program has crashed and burned at least three times. and the user is still having problems. -- up here, ma'am. it's been down the whole time you've been testifying. the system is down at this moment. my question, ma'am, is very simple. when did you know these (unintelligible) were going down a month, a day, a quarter, and did you tell the president what you knew? >> sir, i was informed that we were ready to launch on october 1st. the contractors who we had as

our private partners told us and told this committee that they had never suggested a delay, and that is accurate. our cms team felt we were ready to go. i told the president that we were ready to go. clearly, i was wrong. we were wrong. we knew that in any big, new, complicated system, there would be problems. no one imagined the volume of issues and problems we've had, and we must fix it. >> a credible journalist said you needed six years -- >> sir, that quote has been repeated. i can guarantee you, i would have never stated that, because the law was passed in march 2010. i chose the open enrollment date. i don't know where that quote comes from, but that is not from me. >> gentleman's time is expired. mr. barrel? >> thank you, mr. chairman. and thanks for attending today, madam secretary. i suspect deep down most people on this committee support the concept of reforming insurance

market so more people have access to better insurance companies. we have disagreements about the means to get to the ends, which is why i voted against aca. it seems every day we're hearing of something new going wrong. i'm worried the short-term enrollment problems could become long-term insurance market problems. my constituents are -- restore their trust -- right now, i'm less concerned about who's to play, more concerned what went wrong and how to fix it and how we ensure it doesn't happen again. nearly all of our constituents want and need health insurance. it would be a huge mistake if we're blinded by our love and hatred by obama care that we miss opportunities to address its flaws. the subject of technical problems becoming market problems. can problems of folks getting into the system snowball into

risk-pool problems, where those who choose not to enroll can actually affect the cost of those who do choose to enroll? >> certainly, a risk pool needs a balanced market, so you need people who are older and sicker to be balanced with people who are younger and healthier. that's how a pool works. >> at what point will we see a problem -- >> we'll take a break here. the testimony continues. you see the market there close to session lows with the dow down 27. the fed statement on the way in a little bit. and the president will speak about health care in boston around 3:55 p.m. eastern time. we're back in a minute. "halftime" on the other side. ♪

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bny mellon. welcome to the "halftime report." i'm scott wapner. you, of course, have been watching secretary of health and human services, kathleen sebelius testify before a house committee on the problems with the rollout of obama care. it is a hearing that at times has been confrontational. bertha coombs joins us with the very latest and the highlights from the capitol. bertha? >> scott, it seems as secretary sebelius benefited from yesterday being able to see maryland tavenner take a grilling. the cms administrator had a very hard time. sebelius seemed to come on the offensive. she came and she admitted